Asian hospital giant IIH eyes Singapore-to-Turkey vaccine push

Photo: Munshi Ahmed/Bloomberg
IHH Healthcare Bhd., Asia’s most valuable hospital group, said it is ready to administer coronavirus vaccine once they are rolled out in the 10 countries it operates in.

The Malaysian company has a trained staff of 55,000 across 80 hospitals it runs from Turkey to Singapore, as well as cold-storage facilities required to store the shots, Managing Director and Chief Executive Officer Kelvin Loh Chi-Keon said in an interview.

“We still continue to battle Covid-19 and as governments make the vaccine available in the different geographies that we serve, we stand ready to support them,” he said.

Health systems around the world are shifting focus from research and development to distribution following vaccine news from Pfizer Inc., Moderna Inc. and AstraZeneca Plc. In India, which is battling the world’s second-worst outbreak, Apollo Hospitals Enterprise Ltd. this week said it is ready to inoculate 1 million people a day after the government unveils the deployment plan.

For IHH, the immunization drive comes at a time when medical tourism, a key revenue stream for hospitals, has disappeared as resurgences force countries to keep borders closed.

The company’s shares rose 0.2% to 5.58 ringgit at the close on Friday, taking the week’s gain to 2.4%.

Record Cases

Hospitals in Malaysia, the company’s home market, may earn 500 million ringgit ($123 million) in revenue from medical tourists this year, the Malaysia Healthcare Travel Council said in September. That’s far short of the 1.7 billion ringgit the industry earned in 2019, and its earlier 2020 target for 2 billion ringgit.

New coronavirus cases in the country hit a record 2,234 on Thursday.

Still, IHH said it expects to meet its target of doubling its return-on-equity in the next five years. Covid-related services in Singapore contributed 10% to its third-quarter revenue, while their share from India was as high as 26%, Loh said.

“We will continue to grow, but in as capital efficient manner as possible,” he said. “Covid-19 doesn’t change that.” The company’s ROE stands at 3% at present.

Excerpts from the interview:
  • IHH’s expansion strategy in China
    • China’s recovery remains strong, as is growth in IHH’s hospital in Hong Kong
    • To open another hospital in Shanghai after starting facility in Chengdu; looking for opportunities at Greater Bay area in Hong Kong
  • IHH’s operations in India, North Asia and Turkey are “not far” from becoming profitable
    • IHH’s non-lira debt in its Turkish business to fall before year-end from 92 million euro as at November
  • IHH sold its 50% interest in Apollo Gleneagles Hospital Ltd., a venture in India, and the transaction is expected to be completed by year-end.

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